Société du Figaro S.A.

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Société du Figaro S.A.

37 rue du Louvre
Paris F-75002
France
Telephone: (+33) 1 42 21 62 00
Fax: (+33) 1 42 21 29 38
Web site: http://groupe.lefigaro.fr

Private Company
Incorporated: 1826
Employees: 1,200
Sales: EUR 500 million ($480 million)(2002 est.)
NAIC: 511140 Database and Directory Publishers; 511110 Newspaper Publishers; 511120 Periodical Publishers; 511130 Book Publishers; 518111 Internet Service Providers

One of France's oldest newspaper groups, Société du Figaro S.A. reigns as one of the country's major media players. The company is focused on its daily newspaper, Le Figaro, the country's leading daily with an average circulation of around two million. The success of its newspaper has led Société du Figaro to build up a stable of related titles, including Le Figaro Magazine, a leading weekly news and information magazine; the newspaper supplement Le Figaro Enterprises, formerly Le Figaro Economique ; the highly popular Madame Figaro, which, in addition to its success in France is also published in Japan, Taiwan, China, and Korea; and the more specialized titles Le Figaro Patrimoine, Le Figaro Etudiant, L'indicateur Bertrand, and Le Figaroscope. Société du Figaro is itself wholly owned by media group Socpresse, which in turn is controlled by the Hersant family. The highly secretive Socpresse controls a larger list of French regional and media newspaper titles, as well as newspapers in the French Antilles, and is said to control as much as 30 percent of the French news media market. Socpresse also acquired two widely read French news and information magazines, L'Expansion and L'Express in 2002. At the end of 2003, Société du Figaro sparked controversy in the French media market when it announced its intention to pull out of the Paris Press Trade Union. Société du Figaro has never officially released sales figures, although sales have been estimated to top EUR 500 million ($480 million) in 2002.

Making Newspaper History in 19th Century France

The origins of Société du Figaro reach back to the early years of the Parisian press. An early version of the newspaper appeared in 1826 under the leadership of Maurice Alhoy and Auguste Lepoitevin Saint-Alme. The daily, which comprised four pages, remained in publication until 1833. A number of attempts were made to revive the paper over the next three decades, with a total of nine different newspapers using the name Figaro or Le Figaro appearing between the years 1835 and 1847 alone.

In 1854, Hippolyte de Villemessant launched a rendition of Figaro that met with more lasting success. The new Figaro initially appeared as a weekly paper that distinguished itself by its opinionated editorial stance. Villemessant proved an innovator in the French newspaper world, introducing the concept of regularly published features and sections and adding news briefs that forced journalists to adopt a more clear, concise style. Figaro enjoyed early success, and by 1856 the paper began publishing as a bi-weekly.

In the early 1860s, Figaro was faced with the emergence of a rival paper, Le Petit Journal. Although targeting a market that was more populist than that of Figaro, the new paper's fast growth nevertheless threatened Figaro 's own growing subscriber base. In 1865, Villemessant quickly launched a second newspaper, the daily L'Evenement, as a direct competitor to Le Petit Journal. However, Villemessant's new publication failed to catch up to its rival; worse, in 1866, after publishing on article on "the rights of the poor," L'Evenement was banned by the French government.

In response, Villemessant converted Figaro into a daily newspaper, and, on its second day of publication, the newspaper took on the name Le Figaro. The newly expanded newspaper displayed an avowedly apolitical stance and began catering to a less exclusive class of readers. At the end of 1866, the newspaper commissioned a certified circulation count—the first French newspaper to do so—and Le Figaro 's official circulation was placed at 56,000, including 15,000 subscribers.

The liberalization of the press in the late 1860s encouraged Le Figaro to adopt a more political tone. The paper also began to attract leading names in the French press and literary scene, such as the controversial Henri Rochefort, Emile Zola, Alexandre Dumas, and Alphonse Daudet.

The Commune of Paris of 1871 formed a turning point for Le Figaro. Suppressed by the Communards soon after the revolt, Le Figaro resumed publication only after the victory of Versailles several weeks later. Le Figaro now adopted an editorial policy favoring the conservative political viewpoint and quickly became the newspaper of reference for Paris's bourgeois and aristocratic classes. The newspaper's right-ofcenter political affiliation became its hallmark and enabled the company to build a solid and consistent readership base.

Villemessant continued to lead the newspaper until his death in 1879. In 1874, Le Figaro expanded its format to eight pages. The newspaper then became the first in France to feature weather information in its pages in 1876. Villemessant had by then begun to prepare his successors, taking on Francis Magnard as editor-in-chief in 1875. Magnard then became one of three co-directors of the newspaper after Villemessant's death.

Le Figaro served as the launching point for Emile Zola's campaign during the Dreyfus affaire at the turn of the century, a campaign which culminated in the famous "J'accuse" published in rival paper L'Aurore in 1898. The newspaper continued to innovate into the new century, adding a new weekly literary supplement in 1906. That year also saw the publication of the first photograph, one illustrating an advertisement, in the newspaper's pages. Le Figaro did not use photographs to illustrate news items until 1934.

Interwar and Postwar Changes

By then, the newspaper had undergone a change of ownership after François Coty, the perfumer, acquired a majority of Le Figaro in 1922 as part of his expanding media empire. Under Coty's ownership, the newspaper temporarily changed its name back to Figaro in 1929 and expanded its readership through the acquisition of Le Gaullois. At the same time, the paper expanded to ten pages. The new format provided space for added features, such as the newspaper's first crossword puzzles. However, Coty's open admiration for fascism and avowed anti-Semitism (Coty also published a number of rabidly anti-Semitic titles) compromised the newspaper, leading to its decline in the 1930s.

After Coty died in 1934, ownership of the newspaper was taken over by Coty's widow, who brought in Pierre Brisson as editor. Brisson now worked to resurrect the paper's reputation, changing its name back to Le Figaro and re-orienting it with an emphasis on literature. Le Figaro now became the home for many of the interwar period's top literary figures, including François Mauriac, Jean Giraudoux, and André Maurois. At the same time, Le Figaro became noted for its coverage of international events, such as its reporting of the Spanish Civil War, and sent reporters on assignment around the world.

During World War II, Brisson's editorial line led the newspaper into conflict with the Nazi occupiers and the Vichy government. The newspaper moved its offices to Tours in 1939, and from there to Bordeaux, then Clermont-Ferrand, and finally Lyon in 1940. Le Figaro was finally forced to suspend publication in 1942.

Le Figaro reappeared on newsstands soon after the liberation of Paris in 1944 and began the steady growth that was to mark the paper's fortunes in the second half of the century. By 1945, the newspaper had already reached printing runs of 213,000, and even this was not enough to meet demand. Restrictions on individual publications due to paper shortages during the postwar period led the company to separate its literary supplement from the main newspaper, forming the self-standing paper Le Littéraire in 1946. Renamed Le Figaro Littéraire in 1947, the new paper featured many noted literary names of the period, including Colette, Julien Green, and Paul Claudel.

In 1950, Coty's widow sold half of Le Figaro to media magnate Jean Prouvost, whose stable of titles included Paris Match, France Soir, and Marie Claire. At the same time, Le Figaro itself was incorporated as Société Fermière d'Edition du Figaro et du Figaro Littéraire. Pierre Brisson was named CEO of the new company, a position he held until his death in 1964.

Le Figaro enjoyed great success in the postwar period, seeing its subscription base rise to 90,000 and its total circulation top 500,000 by the 1950s. In 1960, the paper expanded to a 24-page format. By then, the company had also established press offices in New York, Washington, Rome, Brussels, Bonn, Moscow, London, and Tokyo, as well as correspondents in Greece, Brazil, Israel, and Algeria.

Media Group for the New Century

Coty's widow sold her remaining shares in the company to Prouvost and partner Ferdinand Beghin in 1965. Prouvost then acquired complete control of Le Figaro in 1970. In 1975, however, Prouvost announced his intention to sell a majority of Le Figaro to one of France's most controversial media figures, Robert Hersant. The announcement met with a great deal of outcry, and a large number of Le Figaro 's editorial staff resigned from the paper in protest.

Hersant had build a French media empire since the 1950s, starting with the launch of L'Auto Journal in 1949. Through his company, Socpresse, Hersant then began gathering a collection of primarily smaller provincial newspapers. Yet Hersant's past proved a source of continual embarrassment for the media magnate. His pro-Nazi and pro-Vichy activities during the war had led to his being condemned in 1946 to a ten-year sentence of "national indignity." Although the sentence was dropped as part of the national amnesty in 1952, Hersant—whose penchant for buying up newspapers earned him the nickname "papivore"—continued to inspire distrust throughout his life.

Company Perspectives:

Delivering clear and precise information each day, placing the reader at the center of our business, these are Le Figaro 's ambitions.

Nonetheless, Hersant considered himself first and foremost a newspaperman. Under Hersant, Le Figaro blossomed into a full-fledged media group. One of Hersant's first moves was the acquisition of two other newspapers, L'Aurore and the popular right-leaning evening daily France Soir. These purchases led the socialist government to enact a new law in an attempt to limit consolidation in the media sector. That law became known as Hersant's Law, in that it clearly targeted Hersant's control of some 40 percent of France's newspaper market. Hersant emerged the victor, however, when the courts declared that the law could not be applied retroactively.

Hersant then merged L'Aurore into Le Figaro, which became the clear leader in France's daily newspaper market. Hersant next began developing the Le Figaro name as a brand—a rare and innovative move in the French media market. In 1978, Le Figaro repackaged Le Figaro Littéraire as a weekly news magazine, called Le Figaro Magazine. Two years later, the group added a second offshoot of its core newspaper, Madame Figaro. Launched as a monthly at first, the popularity of the women's format encouraged the company to move to a bimonthly publishing schedule in 1983, and then to a weekly schedule the following year.

Le Figaro next targeted the financial market, launching a weekly supplement to the newspaper, Le Figaro Economie, in 1985. Two years later, the company added a weekly cultural supplement as well, Le Figaroscope. The company also launched a weekend supplement magazine in emulation of the British newspaper market. In the late 1980s, Hersant, seconded by his son Phillip Hersant and right-hand man Yves de Chaisemartin, began to steer Le Figaro 's editorial style closer to the more concise, fact-oriented British reporting style as well. In another break with French newspaper tradition, Hersant moved to take control of Le Figaro 's—along with his other publications'—printing processes, opening a printing plant, Roissy Print, in 1989. The following year, the company rolled out a Japanese edition of Madame Figaro.

In the meantime, Hersant, through Socpresse, had continued expanding his larger media empire, even venturing into television, along with Italy's Silvio Berlusconi, in the ill-fated Tele 5 venture. Hersant began running up huge debt loads in order to support his purchases. While many of Hersant's publications remained money-losers, their losses were covered by the healthy profits enjoyed by Le Figaro into the early 1990s.

Yet Hersant's empire began to unravel as Le Figaro, hit hard by a crisis affecting the French newspaper market in general in the 1990s, slipped into losses as well. Hersant was forced to trim a number of titles, including the sale of some 20 magazine titles to Britain's Emap in 1995. When Hersant died the following year, many observers expected Socpresse, and Le Figaro with it, to collapse.

Le Figaro quickly named de Chaisemartin as head of Socpresse, as well as president of Le Figaro. Socpresse promptly sold off money-losing France Soir and de Chaisemartin was then able to turn his attention to getting Le Figaro back on track. The company's new strategy involved the launch of two new titles, Le Figaro Multimedia and Maison Madame Figaro, the latter title being a companion to the company's highly popular women's magazine. In the meantime, as the company's financial position weakened into the second half of the 1990s—with its debt levels rising to more than one-third of its revenues—Le Figaro was forced to begin considering the addition of new investors.

After rejecting approaches by media group Havas and aviation tycoon Serge Dassault—which would have forced the Hersant family to give up much of their control of the group—Socpresse agreed to sell a 4.9 percent stake in Le Figaro, as well as a series of convertible bonds worth up to 40 percent of the group, to the American concern the Carlyle Group. The purchase, described as a leveraged buyout of Le Figaro, enabled the group to pay down much of its debt and restructure its financial situation.

Key Dates:

1826:: Figaro, a daily newspaper, is launched in Paris.
1833:: The original Figaro ceases publication.
1854:: Hippolyte de Villemessant relaunches Figaro as a weekly newspaper.
1866:: Le Figaro becomes a daily newspaper.
1906:: Launch of a literary supplement.
1922:: Perfumer Francois Coty acquires majority control of Le Figaro.
1934:: After Coty's death, Pierre Brisson is named head of Le Figaro and revives it as a literary newspaper.
1942:: Le Figaro is forced to cease publication.
1944:: Le Figaro is relaunched.
1946:: Paper shortages lead Le Figaro to launch its literary supplement as a separate publication, Le Littéraire, which becomes Le Figaro Littéraire the following year.
1950:: Coty's widow sells half of the company to Jean Prouvost.
1965:: Prouvost-Beghin partnership takes full control of Le Figaro.
1970:: Prouvost buys out Beghin.
1975:: Prouvost sells majority control of Figaro to Robert Hersant.
1976:: Hersant acquires L'Aurore, which is merged into Le Figaro.
1978:: Le Figaro Littéraire become Le Figaro Magazine.
1980:: Madame Figaro begins publication.
1985:: Le Figaro Economie supplement is launched.
1990:: A Japanese edition of Madame Figaro begins publication.
1996:: Robert Hersant dies; Le Figaro Multimedia and Maison Madame Figaro are launched.
1999:: Carlyle Group and partners acquire the rights to 40 percent of Le Figaro.
2002:: Carlyle Group sells back its stake in Le Figaro ; the publication's parent company Socpresse sells a 30 percent interest in Le Figaro to Serge Dassault.
2003:: Le Figaro announces its plan to withdraw from Paris Press Trade Union.

As part of its restructuring effort, Le Figaro underwent a facelift in 2000, marking the first time in some 20 years that the newspaper had changed its format. The new style was meant to present a more modern and dynamic image to the paper's readers, who now numbered more than 1.5 million, a figure signifying Le Figaro 's continued leadership position in the French market. That year, the company also launched its Web site, which boasted its own editorial team.

Another part of the newspaper's restructuring involved the transition of the Le Figaro Economie supplement into the newly styled Le Figaro Entreprises. Madame Figaro remained the group's most successful international title after the launch of a Chinese edition in 1999. The company then added a Korean edition in 2000 before expanding the magazine to Taiwan in 2001.

Although the Carlyle Group had originally hoped to recoup its investment in Le Figaro through a public offering of its shares, in 2002 the group agreed to sell back its stake in the paper to Socpresse, giving that company 100 percent control of its flagship newspaper group once again. In addition, the years in partnership with the Carlyle Group had enabled Le Figaro to rebuild its financial situation. Soon after the Carlyle Group sale, the Hersant family agreed to allow Serge Dassault to buy a 30 percent stake in Socpresse, enabling the family to maintain a 70 percent stake in the company and continued control over Le Figaro.

The addition of Dassault, and his money, enabled Socpresse to expand its position in the French media market, notably through the acquisition of L'Expansion, L'Express, and a number of other prominent titles in 2003. Yet these purchases once again saddled Socpresse with a heavy debt—this time a short-term load of some EUR 230 million to Dassault himself. Rather than allow Dassault to increase his shareholding in the group to as high as 45 percent, Socpresse sought means of cutting costs, leading Le Figaro to announce, at the end of 2003, its decision to pull out of the Paris Press Trade Union.